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Keeping Customers Informed Through Market Volatility
- ookblah 6y agothey just restricted buying for it across the board. wow lol
- draklor40 6y agoMarket manipulation to prop up Hedge Funds. So much for "Robinhood".
- djschnei 6y agoWhat an unbelievably condescending blog post... "Play by our rules and educate yourselves, you plebeians!" - Robinhood
- cronix 6y agoI think that was the Sheriff of Nottingham who said that.
- xirbeosbwo1234 6y agoWhy would they think the self-described "dumb money" isn't well informed?
- treesknees 6y agoBastards
- youeseh 6y agoI hope this stays on the frontpage of Hacker News for months to come.
- robjan 6y agoTranslation: we're gonna IPO soon and we want the hedge funds to treat us well.
- youeseh 6y agoAlso translation: "We think you'll come back, but if the people who pay us - the hedgefunds go under - then we'll be shit out of luck too. Sorry not sorry".
- beervirus 6y ago"We won't let you buy GME on margin anymore" would be a reasonable idea. "We won't let you buy GME in cash" is ridiculous.
- jackfrodo 6y agoWhat a betrayal of their customers. Really going mask-off with what it means for a startup to "democratize" an industry: allowing the little guy to chip in, but never actually compete with the big boys.
- SirSavary 6y agoNot 100% the same but this feels similar to the Apple crowd explaining to me that I don't want an open computer in my pocket.
- jackfrodo 6y agoSure with broad strokes, it generally sucks when a tech company makes unilateral decisions for its customers, whether that's restricting which stocks you can buy or whether you can put unauthorized apps on your iPhone. But I find it particularly egregious because the major principle of RH was that it was on the side of the everyman rather than institutions.
- mrguyorama 6y ago> the major principle of RH The "major principle" is to make billions of dollars by owning the market, as it always seems to be with these silicon valley startups
- jackfrodo 6y agoRight right, I mean the face-value marketing "major principle", the one I was foolish enough to trust for a while.
- vlovich123 6y agoAnd yet their entire business model is that they offer it for free because they sell access to your orders to market makers so that they front run your transaction.
- ChicagoBoy11 6y ago
- sgpl 6y agoI asked on twitter but didn't really get a response to this but I'm curious if someone involved in the industry can answer this for me: If Robinhood is only allowing users to sell, can they choose to sell* (route the customer's sell order) to hedge funds that need to close out their short positions? Is that a thing they can do? *EDIT: I realize that robinhood is passing along these orders to their market maker of choice - so my question really is that can the market maker here preferably sell to hedge funds looking to close their short positions?
- youeseh 6y agoThat is what they're hoping people will do. Exit their positions to make shares available.
- ericmay 6y agoHedge funds don't use Robinhood, so this won't affect their ability to buy or sell. The price plummeted today because of Robinhood and other small brokerages restricting trading the day before lots of shares would have to be purchased to cover in the money options. So, many retail users of Robinhood and other brokerages couldn't buy, could only sell, while hedge funds and other institutions could continue to do what they want. The rules should be the same for everyone, all of the time. If Jane StockPicker can't buy a security, then nobody else should be able to. I'm honestly furious about this. I made a small amount of money on GME and cashed out a couple days ago - the shorts were in a bad spot, too bad - so seeing how other retail investors are being screwed over here makes me feel sick. Oh, and Melvin Capital (one of the short sellers who has been most screwed by taking a bad position) was bailed out by Citadel, and guess who one of Robinhood's investors is? I'm not exaggerating when I say that there needs to be a congressional hearing and SEC investigation. You can say what you want about retail traders exchanging ideas on WSB, a public forum, but closing down trading for retail investors cost them a lot of money early and why were hedge funds able to short a stock so heavily? Pending investigation, this is a serious problem and I think there is likely to be ongoing corruption here.
- itronitron 6y agoRH must think that paying any resulting 'fine' will be much less than what Citadel would have lost otherwise.
- ralph84 6y agoRetail traders aren’t their customers, they are the product. Same as any other “free” service.
- HammadB 6y agoYou also cannot search for the short-squeezed stocks from this whole WSB push. They unlisted GME, AMC etc on Robinhood. Searching for them returns nothing. That feels really wrong.
- cft 6y agoThat's the new kind of deplatformings. I wonder how much the obedient public will take before they revolt.
- function_seven 6y ago> Our mission at Robinhood is to democratize finance for all. Anyway, here's how we're doing the exact opposite. Our real customers have indicated that they want the following stocks to drop in price: > $AAL, $AMC, $BB, $BBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG "We’re committed to helping our customers navigate this uncertainty." makes much more sense when read a different way.
- adoxyz 6y agoExactly this.
- jonwachob91 6y agoWait... What about AAL? I've been holding AAL for 6 months now :/
- jaywalk 6y agoSorry, it looks like it was talked about too much on social media, causing the price to go up. The people in charge want it to go down, so it's blocked. Thanks for choosing Robinhood!
- ApolloFortyNine 6y agoAAL is definitely the fishiest of the bunch, it's not even close to back to precovid levels, and it's a reasonable buy for anyone who expects travel to return to normal at some point. It reads like they got a list of positions to halt buying on from their investers.
- bearble 6y agoWeRe DoInG iT tO PrOtEcT YoU
- robot1 6y agoWe love the "free" market
- jaywalk 6y agoI haven't minded Robinhood's repeated failures to keep their service operating when market volatility is high, because I'm not trying to time the market. But this... this is entirely unacceptable.
- samizdis 6y agoAs luck would have it, a S Korean asset managment company sold its considerable holding (creating what in normal times would be a classic stock overhang) just when retail trading platforms had selectively blocked stock buys for GME et al. https://www.marketwatch.com/story/large-gamestop-shareholder-must-asset-management-sold-off-its-stake-2021-01-28?mod=bnbh https://www.marketwatch.com/story/large-gamestop-shareholder... The optics for this seem poor. As for the smell, more of a stench. [Edit to add: poor and smelly for the retail trading platforms, that is.]
- borishn 6y agoSelling when others are prevented from buying is not in the interest of the seller.
- toufka 6y agoAnd so there must have been an additional interest for the seller, in addition to making only a massive amount of cash off of the past week. I am curious about what other incentives they might have been offered to offload now, as opposed to next week.
- cactus2093 6y agoWow this statement seems much worse than saying nothing. I am even willing to give Robinhood the benefit of the doubt here, I know it feels like a conspiracy against retail investors, maybe it is, but the stock markets are an extremely complex system and we don't know all of Robinhood's own risks and factors going into this decision. However, to weigh in without addressing the reasoning at all and only link to resources for people to "educate themselves" is so absurdly out of touch. Maybe they should write up some nice shiny content marketing for hedge fund managers to educate themselves about risk exposure.
- jo032 6y agohow could this possibly be worth it for RH? Their reputation is ruined with their core customer base and regulators are going to go after them now too
- IgorPartola 6y agoRobinhood is owned by Citadel, one of the companies that stand to benefit quite a bit from GME dropping.
- tonyaiken 6y agoCitadel invested in robinhood, and Melvin Capital
- bgdnpn 6y agoYou cannot expect a company that's built most of its hype by profiting from uneducated "traders'" naivety to be fair to them when the seas are rough.
- happytoexplain 6y agoYou absolutely can. "Expect" doesn't necessarily mean "think will happen". It can also refer to having "expectations" of responsibility, which is good. If you don't, then the irresponsible will never hear any criticism of their behavior. How clear it was that they were going to misbehave is beside that specific point.
- fotta 6y agoShould’ve been a bigger deal when TD Ameritrade did it yesterday because that just gave Robinhood the precedence to do the same.
- Consultant32452 6y agoThe last year had been like a fire hose of red pills aimed right into the face of regular people.
- jennyyang 6y agoIf you read this drivel, and don't close your Robin Hood account today, then you're part of the problem. I closed mine and I hope everyone else does too. I read a comment on reddit recently that is pertinent. The prey in Africa, ie. wildebeests and buffalo, are extremely powerful. But a handful of lions make them scatter out of fear. But if the prey were more organized, they could trample every single one of those predators to the point where they could kill them off. It's the power of organization that helps the prey defeat the predators. This is the exact same thing here. As long as a handful of billionaires tell the retail investor what to do, the billionaires will keep making money off of them.
- sauwan 6y agoJust waiting for my trades to close so I can cash out. I was only holding VTI and a tiny amount of BTC, so I have no horse in this race, but I'm certainly not waiting for them to pull other shenanigans on me.
- Shicholas 6y agosame, I don't have any $GME but I still feel like I lost a lot of money today b/c of these shenanigans.
- zaltekk 6y agoUnfortunately the account deactivation story is quite poor. Under Settings > Account Information > Deactivate Account you're just sent to a customer service email form. They say it takes 1-3 business days to process. As a side note, you have to close out all of your positions and transfer out all of your money before you're allowed to close the account. This seems unusual to me from experiences with other brokers. From my understanding the average retail broker will allow you to transfer you assets out to another brokerage. You can do this as part of closing your account. While just transferring money out separately and keeping the account open longer isn't a big deal, there's tax and other financial implications to having to close your positions instead of transfer them. You'll have to realize capital gains. You'll also have multiple banking days in which the price could move up while your money is transferred to another brokerage to re-buy the shares.
- disease 6y agoReminds me of how a casino can kick anyone out just because they are winning too much. I think everyone knows that the stock market is rigged but moves like this just completely drop any kind of pretense.
- deleted 6y ago[deleted]
- simonebrunozzi 6y agoI f-ing hate these PR-approved statements by companies. Explain to me how these two sentences could be in the same statement: > In light of recent volatility, we are restricting transactions for certain securities to position closing only, including $AAL, $AMC, $BB, $BBBY, $CTRM, $EXPR, $GME, $KOSS, $NAKD, $NOK, $SNDL, $TR, and $TRVG. > We fundamentally believe that everyone should have access to financial markets. Bullshit. Edit: if you have a Robinhood account, you should close it today.
- boatsie 6y agoRobinhood is in a tough position. Retail is going crazy for the stock because it seems like everyone else is, and is clearly not based on fundamentals. But what can Robinhood do? It’s possible the huge institutional shareholders have sold off their positions to main st and now they will get stuck holding the bag. Fidelity and Blackrock might have made $10B each from this runup while selling to these buyers. Most folks will have huge losses. The WSB narrative is that it’s Melvin capital holding all of those short shares, and they want to stick it to them. But we don’t really know how many shares they actually hold, surely they aren’t 100% of the short interest. It will be very interesting once all this unwinds and we see who was holding what.
- sauwan 6y agoWhy is RH in a tough position? They're a market maker, not a market controller. This should just be a reminder to everyone that if you're getting commission free trades, you're not the customer and your interests come after the real customers.
- mathgenius 6y agoYeah, RH could legitimately be trying to protect their users from what is basically a pump & dump scheme. Alternatively, they could be having liquidity troubles, or backend trouble, etc. If you are serious about trading you should not be on RH...
- happytoexplain 6y ago>If you are serious about trading you should not be on RH While basically true, this isn't a reasonable excuse to shift blame from RH to their users.
- throwaway2245 6y ago> RH could legitimately be trying to protect their users from what is basically a pump & dump scheme Considering that RH's business model has benefited from getting people excited about gambling on volatile stocks, I highly doubt they would be motivated to protect their customers from pump & dump.
- throwaway_2225 6y agoPreviously respected Robinhood and thought of them as a possible future employer. All that changed in a single day.
- firebaze 6y agoSimply ridiculous. I own quite a few stocks, but still i considered using robinhood due to far less friction. Obviously I'll abstain from that for the foreseeable future.
- deleted 6y ago[deleted]
- ballenf 6y agoI really wonder if a court would entertain a temporary injunction forcing RH to reverse this move. Temporary equitable relief seems justifiable here -- not a slam dunk but not outside the realm. Especially with the circumstantial evidence that RH is acting against its customers at the benefit of some of its owners. And surely RH wasn't so dumb to tell Citadel or anyone about this move in advance. Wouldn't that be a serious insider trading claim if they opened any short positions after learning about the move but before it became public?
- jcranmer 6y ago> I really wonder if a court would entertain a temporary injunction forcing RH to reverse this move. Almost certainly not. Quoting from a typical motion to deny a temporary injunction: > As courts have repeatedly emphasized, an injunction represents an “extraordinary remedy” that is never awarded as a matter of right. See Winter v. Natural Res. Def. Council, 555 U.S. 7, 22 (2008). For a preliminary injunction to issue, the moving party has the burden of demonstrating all four of the following elements: (1) that it is likely to succeed on the merits; (2) that it is likely to suffer irreparable harm in the absence of preliminary relief; (3) that the balance of equities tips in its favor; and (4) that an injunction serves the public interest. Winter, 555 U.S. at 20. How is there any irreparable harm here? The worst that a customer would face is that they lose money--which is the most reparable harm.
- ballenf 6y agoThe irreparable harm is triggering a crash. Or just an unnatural price correction. Irreparable because no one can predict how the price would have moved under non-manipulated conditions.
- jcranmer 6y agoIn a crash, you lose money. I can repair your harm of lost money with cash after the fact. Ergo, that is not irreparable.
- maxbond 6y agoThe responses in this thread are frankly disturbing. People are accusing Robinhood of manipulating the market on behalf of short funds, when WSB had literally been systematically stopping these funds out. Pot and kettle much? People don't seem to understand what is protective about these actions. They aren't stopping anyone from closing positions - just from opening or adding to positions in the middle of a speculative mania. However you feel about that, it's exactly what retail brokers do, and always has been. Do you really think people buying into AMC right now are anything other than bag holders? The company is teetering on bankruptcy. The stock will quite possibly be worth $0 in the next year or so. Why should Robinhood let people blow up their accounts? How would the SEC and CFTC look upon that? People are saying this is unacceptable and that they're going to move to a different broker. What broker? Virtually all of the retail brokers did this today. I think Robinhood is a terrible broker that encourages overtrading and frames markets as being almost purely about price action, and if you want to close your account there and move to a better broker then I think that's great. But the reasons being given here are disconnected with reality.
- castlecrasher2 6y ago>However you feel about that, it's exactly what retail brokers do, and always has been. Please, elaborate on the last time a broker or brokers did this when the stock was >140% shorted, let alone any other time they stopped retail investors from losing money on an overpriced stock. This stinks of market manipulation, and you're a fool if you think it's for retail investor protection.
- dang 6y agoPlease don't cross into personal attack in HN comments, no matter how wrong you think someone is or how strongly you feel. It just makes everything worse. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
- dustymcp 6y agoTime for a name change i suggest princejohns
- dang 6y agoThe main thread on this is https://news.ycombinator.com/item?id=25941431 https://news.ycombinator.com/item?id=25941431. For pointers to the rest of this massive story graph, see https://news.ycombinator.com/item?id=25933543 https://news.ycombinator.com/item?id=25933543. Although HN's guidelines call for original sources (https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html), it's generally better to avoid corporate press releases, especially on controversial topics where they tend to use bland, obscure language and bury the lede. https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sort=byDate&type=comment&query=corporate%20press%20release%20by:dang https://hn.algolia.com/?dateRange=all&page=0&prefix=true&sor...